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Mick Harper
Site Admin
In: London
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| Wiley wrote: | | Here is how I understand it You are talking about Very Large Crude Carriers (VLCC) that move up to 2 million barrels of oil. |
I'm talking about all oil tankers. The principle applies to them all.
| The ship owners purchace these (VLCC) then charter these out. |
We've been here before. You won't say who these mysterious charterers are. But, if you insist, replace all references to 'shipowners' in my argument with the words 'ship-charterers'.
| To make profit the ships owner will then receive daily payments, from those that charter these VLCC. |
If you say so. Let's hope these ship-charterers of yours make some...
| Daily payments (earnings) - Daily operating expenses (crew and ships maintenace) - depreciation = ship owner profit......... |
Yup, that just about covers it.
| The big impact impact of the war, for the Ships owners are the cost of insuring each tankers hull. A 10 year old supertanker is worth $80-90 million. But the biggest worry is if your tanker is not chartered out. |
Of what relevance is this? We are dealing with a peaceable Strait of Hormuz through which ships are passing, having paid their toll to the Iranians.
| These owners need to be getting in $16,000 a day, by chartering their ships out, just to cover the carriers depreciation. |
I'm obliged for the information.
| Profit or loss is dependent on the demand and supply of VLCCs as this forces up and down the charter price. |
That has always been my understanding.
| The ships owner does not normally pay any tolls or fees. Under standard industry contracts, the charterer (the person or company leasing the vessel and moving the cargo) is ultimately responsible for covering voyage costs, including fees or tolls. |
That's what I said.
| In practice with a dark fleet operating, who knows? |
Not me, squire. I don't recall there being any dark fleets in my account so I won't be bothering to find out.
| The person or company, leasing the VLCC, for the purpose of moving the cargo is making their profit in a different way. |
Do tell!
| Total revenue from final sale of oil - cost purchase of oil + cost of moving oil, charter, tolls etc = profit |
What a disappointment. That's exactly what I said.
| Profit or loss is mainly dependent on having a low buying price and higher final selling price. |
It is wholly dependent, I would have thought. But do go on.
It sure does.
| but if the end user is actually willing to pay more |
He won't be though, will he? He'll be willing to pay the market price but if your oil is more expensive, he'll tell you, "No thanks, we'll get it from one of the thousands of tankers willing to sell us oil at the market price."
| you can still up your final selling price, if demand outstrips supply. |
er... the market price is settled by demand meeting supply. If demand is outstripping supply, then the price will rise accordingly. But whatever it is either that's your final selling price or you've got a tanker of unsold oil on your hands.
But I've got a feeling you're going to stick to your guns irrespective of anything I say.
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Mick Harper
Site Admin
In: London
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You have to hand it to Chicago. All those eager beavers buying and selling oil on the basis of guesses about the future status of the Strait of Hormuz have, like monkeys producing Shakespeare, hammered out a clear price structure
$50 - $60 per barrel if the Strait is open for business
$80 - $90 per barrel if the Strait may or may not be open for business
$100 - $110 per barrel if the Strait is closed for business
You may not like the world's oil fortunes being decided by a bunch of dudes who never go near the stuff but it's undeniably impressive.
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Wile E. Coyote
In: Arizona
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You have to hand it to China.
They have taken a view that they will always will buy under $80 per barrel, to build up stocks, and have reduced their consumption. They have reduced their export of refined oil. They have unlike the US, poltical class and companies, not allowed themselves the temptation of gambling and cashing in on the crisis.
In short they have acted nobly in Chinas long term self interest, to ensure that the country, who most experts thought was at the greatest risk from the closure of the Strait, is not in any danger, unlike some other economies. For for those that havnt noticed, or ignore it, the US short term actually benefits economically from the straits closure, its just they are in danger of losing all their allies in the region, (Saudi Arabia, UAE, Qatar, and Kuwait) who have funded, massive investment portfolios in the US. There is no point in the Gulf states gifting the overlord, that does not protect them.
The Chinese have no need to take sides.
The Chiese dont need to buy at over $80.00.
You might not like China taking over the Middle East, but this is undeniably impressive, they will at the end of all this have everybody in the Gulf paying for their oil in "petroyuan".
In order to win, sometimes you just have to let the other side continue to make mistakes........
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Mick Harper
Site Admin
In: London
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| Wiley wrote: | | You have to hand it to China. They have taken a view that they will always will buy under $80 per barrel, to build up stocks, and have reduced their consumption. They have reduced their export of refined oil. |
He's being very moderate. I'm suspicious.
| They have unlike the US, poltical class and companies, not allowed themselves the temptation of gambling and cashing in on the crisis. |
That's more like the wild stabs we have come to know and love.
| In short they have acted nobly in Chinas long term self interest, to ensure that the country, who most experts thought was at the greatest risk from the closure of the Strait, is not in any danger, unlike some other economies. |
Like what economies? It all sounds a bit 101 to me.
| For for those that havnt noticed, or ignore it, the US short term actually benefits economically from the straits closure |
As I have been pointing out for yonks.
| its just they are in danger of losing all their allies in the region, (Saudi Arabia, UAE, Qatar, and Kuwait) |
True enough.
| who have funded, massive investment portfolios in the US. |
I thought you said the US was doing well out of it. Surely those investment portfolios will be on the up and up.
| There is no point in the Gulf states gifting the overlord, that does not protect them. |
There is every point. They might be cursing the Americans for upsetting unnecessary apple carts but there isn't anyone else to protect them from Iran, is there?
| The Chinese have no need to take sides. |
Yes, they do. Whichever side is more likely to get the Hormuz Strait open.
| The Chiese dont need to buy at over $80.00. |
Yes they will. Eventually. If the Strait is closed long enough for these fabled stocks to run out.
| You might not like China taking over the Middle East, but this is undeniably impressive, they will at the end of all this have everybody in the Gulf paying for their oil in "petroyuan". |
Oh, I didn't know about this. It's not like the Chinese to 'take over' anywhere outside China (at least the way they define China) so you'll have to say where you got this incredible intelligence.
| In order to win, sometimes you just have to let the other side continue to make mistakes........ |
Wise words. I expect.
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Wile E. Coyote
In: Arizona
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China has been pushing Gulf Cooperation Council (GCC) states to settle their oil and gas trades in the Chinese yuan (renminbi) instead of the U.S. dollar for years.
Beijing views this shift as a vital step in its broader geopolitical strategy to internationalize its currency and reduce global reliance on the petrodollar.
It has developed Renminbi clearing hubs in numerous countries including Gulf States since 2010.
They have carefully tested and built the (reminbi) architecture over the last 20 years, so they are now about ready to go, at least in the Gulf area. People are ignoring that China has overtaken the West as the Gulf’s largest trading partner. Gulf-China trade reached US$257 billion, before the war. That was already more that of the US, UK and Eurozone combined. The US hope was that Trumps pre war visit, would reverse these trends and lead to greater co-operation.
Good luck with that now.
https://en.wikipedia.org/wiki/Internationalization_of_the_renminbi
https://www.asiahouse.org/publications/the-middle-east-pivot-to-asia/
The Chinese have set up the ecomic and financial conditions.......
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Mick Harper
Site Admin
In: London
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I agree with all this.
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Wile E. Coyote
In: Arizona
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There is every point. They might be cursing the Americans for upsetting unnecessary apple carts but there isn't anyone else to protect them from Iran, is there?
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The judgement is whether they will be attacked by Iran if they do not house US bases, would they have been a target during this war?
They can make military alliances, eg Pakistan, they have the money to still buy weapons, and influence, its up to them to decide from whom.
At this stage they are looking, and they are now negotiating without the US, eg over the vital strait.
Was Oman (yes Oman) put off by their Overlord threatoning to bomb them?
Not at all.......it is pragmatically doing a deal with a neighbour.
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Mick Harper
Site Admin
In: London
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| Wiley wrote: | There is every point. They might be cursing the Americans for upsetting unnecessary apple carts but there isn't anyone else to protect them from Iran, is there?
The judgement is whether they will be attacked by Iran if they do not house US bases, would they have been a target during this war? |
They did not decide to have US bases for any other reason than the incipient threat from Iran. And let's face it they haven't paid much of a price for doing so. They have paid an enormous price for the Strait of Hormuz being closed but that is a different question.
| They can make military alliances, eg Pakistan |
You have created a bogus list by the use of etc so I presume there are no others. Personally I wouldn't dream of putting even Pakistan on the list. What are they going to do, brandish their nukes to support countries with whom they have very little in common?
| they have the money to still buy weapons, and influence, its up to them to decide from whom. |
But that's the whole point. Saudi Arabia spent zillions on weapons and gets regularly bested by Iranian proxies (the Houthis). What price Iran itself?
It's true the Arab Gulf states can each afford to stock up with a million missiles and import Ukrainians to set everything up for them but I don't think any of them will relish going head to head with a country that has just demonstrated the entire American armoury doesn't faze it one little bit.
| At this stage they are looking, and they are now negotiating without the US, eg over the vital strait. |
Really? I hadn't heard, you'll have to provide the details
| Was Oman (yes Oman) put off by their Overlord threatoning to bomb them? |
They've gone very quiet.
| Not at all.......it is pragmatically doing a deal with a neighbour. |
You, me and they would like nothing more than them making a pragmatic deal with Iran. The question is: Do the Iranians want to make a pragmatic deal with them?
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Wile E. Coyote
In: Arizona
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The trilateral Mecca Joint Defence Arrangemnt is starting a new defence architecture.
| The Mecca Agreement enshrines a collective security arrangement directly modeled on Article 5 of NATO,[7] with its official announcement stating that "any armed attack against any one of the three states shall be regarded as an attack against them all." It enables Saudi Arabia to finance and fund defence projects; Turkey to provide deep tech defence equipment; and Pakistan to provide manpower at the frontline; [8] however, analysts have noted that it was unlikely to extend the deterrence of Pakistan's nuclear weapons to cover either Saudi Arabia or Turkey. |
This doesnt mean to say it will happen tommorow, but the foundations are being dug.
| Mick wrote: | They did not decide to have US bases for any other reason than the incipient threat from Iran. And let's face it they haven't paid much of a price for doing so. They have paid an enormous price for the Strait of Hormuz being closed but that is a different question.
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Disagree, growing US involvement, followed Britains military withdrawl in the 1970s.
US bases were built to provide regional security, but not just against Iran. The Kuwaiti bases were built directly after Desset Storm, as a means to protect Kuwait and then contain and finally overthrow Saddam, who at that time was a worse aggressor, than the Mullahs in Iran.
Saddam started the Iraq-Iran war, invaded Kuwait, and then started on Southern Iraq (who were rebelling) and the Marsh Arabs.
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Mick Harper
Site Admin
In: London
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| Wiley wrote: | The trilateral Mecca Joint Defence Arrangemnt is starting a new defence architecture.
The Mecca Agreement enshrines a collective security arrangement directly modeled on Article 5 of NATO |
I have mocked this already.
| however, analysts have noted that it was unlikely to extend the deterrence of Pakistan's nuclear weapons to cover either Saudi Arabia or Turkey. |
The only thing they truly want.
| This doesnt mean to say it will happen tommorow, but the foundations are being dug. |
Oh, it will happen all right. It's perfect PR.
They did not decide to have US bases for any other reason than the incipient threat from Iran.
Disagree, growing US involvement, followed Britains military withdrawl in the 1970s. |
I'd put it in the 1940's when the Americans set up Aramco with the precise purpose of supplanting the Brits as the dominant Middle Eastern power/ oil supremo. We were only too glad to pass the buck. But the actual bases date from much later (apart from a Bahrain naval facility they shared with and then took over from the Brits.) As operational fighting centres, they date from the 1990's. (I agree though that Iraq should be conjoined with Iran.)
| US bases were built to provide regional security, but not just against Iran. The Kuwaiti bases were built directly after Desset Storm, as a means to protect Kuwait and then contain and finally overthrow Saddam, who at that time was a worse aggressor, than the Mullahs in Iran. |
The Brits retained their Kuwaiti link (as well as Aden) and came to their rescue in the 1960's when a pre-Saddam Iraq was rattling the sabre.
| Saddam started the Iraq-Iran war, |
The Americans carefully stayed out of that one until Iran/Contra forced their hand.
| invaded Kuwait, and then started on Southern Iraq (who were rebelling) and the Marsh Arabs. |
The Americans were in, out, shaking it all about. So no change there.
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Wile E. Coyote
In: Arizona
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There is little chance of the US actually wanting to return to their Gulf bases. That era is gone. Even before the current war, the military were advising the Biden administration that the US bases around the UAE, Kuwait, Qatar, and Bahrain were way too vulnerable to Iranian attacks. The war has proven the generals right and Biden wrong.
The idea that you will continue to have Centcom in Qatar 170 miles away from Iran after the latest two wars is bonkers.....
Realistically the US if it wishes to reinstitute bases (there is a constituency of thought that wants to clear out of the Middle East altogether, so even that is not a given) they will be based in Israel.
There is no possibility of the Gulf states, ever financing replacemnt new US bases situated in Israel.
You might mock the Gulf States, but realistically they do need to defend themselves, going forward, without US bases on their territory.
That is unless you can suggest an alternative.
Are you really saying that the US 5th naval fleet is going back to Bahrain......within the Strait of Hormuz, after this conflict?
https://www.middleeastmonitor.com/20260226-us-navy-withdraws-all-vessels-from-bahrain-base-amid-rising-tensions-with-iran/
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Mick Harper
Site Admin
In: London
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| Wiley wrote: | | There is little chance of the US actually wanting to return to their Gulf bases. That era is gone. |
It has? Damn, I missed it.
| Even before the current war, the military were advising the Biden administration that the US bases around the UAE, Kuwait, Qatar, and Bahrain were way too vulnerable to Iranian attacks. The war has proven the generals right and Biden wrong. |
Then they'll stay. In America, the civilians call the shots.
| The idea that you will continue to have Centcom in Qatar 170 miles away from Iran after the latest two wars is bonkers..... |
Ah, well, that's a different matter.
| Realistically the US if it wishes to reinstitute bases (there is a constituency of thought that wants to clear out of the Middle East altogether, so even that is not a given) they will be based in Israel. |
You think the Israelis want foreigners poking around in their country? Your sources really are something, Wiley.
| There is no possibility of the Gulf states, ever financing replacemnt new US bases situated in Israel. |
I'm not so sure. I reckon they'd quite like having Americans plonked down inside Israel.
| You might mock the Gulf States, but realistically they do need to defend themselves, going forward, without US bases on their territory. |
I would mock them if they thought that.
| That is unless you can suggest an alternative. |
I can suggest two. (1) US bases and (2) A change of regime in Iran.
| Are you really saying that the US 5th naval fleet is going back to Bahrain......within the Strait of Hormuz, after this conflict? |
The US 5th fleet has never been based in Bahrain. Some of its ships and command centres have been. I confidently predict they will return to this arrangement after the war.
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Wile E. Coyote
In: Arizona
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| I can suggest two. (1) US bases and (2) A change of regime in Iran. |
The US has been hoping for the latter since Carter was humiliated in 1979.
Bibi promised it would happen within in a few days. That was prior to the war, before the US bases were attacked. The US had just acheived regime change in Venezuela, had a mighty amarda, and they and their allies had lots of interceptors, if Iran fired back.
The plan did not work, their bases are badly damaged, even after they fired off more interceptors in 4 days, than Ukraine has in 5 years, leading them to abandon both the bases and retreat back the Armada over 400 miles.
I really cant see them rebuilding the naval base 130 miles off Iran.
| Then they'll stay. In America, the civilians call the shots. |
Disagree. The current president, wants out and will blame Biden, for not moving or reinforcing the bases before the war. The US military will provide cover for Trump, as they know militarily this is the correct decision, they have been pushing for this.
https://www.middleeasteye.net/news/us-needs-move-bases-from-gulf-to-israel-former-centcom-commander-says
https://www.middleeasteye.net/news/vulnerability-exposed-war-iran-will-change-how-us-bases-troops-gulf
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Mick Harper
Site Admin
In: London
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| Wiley wrote: | I can suggest two. (1) US bases and (2) A change of regime in Iran.
The US has been hoping for the latter since Carter was humiliated in 1979. |
I rest my case.
| Bibi promised it would happen within in a few days. That was prior to the war, before the US bases were attacked. The US had just acheived regime change in Venezuela, had a mighty amarda, and they and their allies had lots of interceptors, if Iran fired back. |
Look, I'm not predicting regime change, you asked for alternatives. You'd have to admit that Trump might win which would pretty much trigger it. You'd also have to agree that even if Iran wins, or it's a no score draw, the IRGC will be left with a ruined country and no pressing need for the IRGC to be in charge of the clear-up.
| The plan did not work, their bases are badly damaged, even after they fired off more interceptors in 4 days, than Ukraine has in 5 years, leading them to abandon both the bases and retreat back the Armada over 400 miles. |
* The bases are not badly damaged, just in need of some TLC.
* They haven't abandoned the bases
* The Armada was never in the Gulf, it took up station in the north-east Indian Ocean where it still is.
| I really cant see them rebuilding the naval base 130 miles off Iran. |
It's always been 130 miles off Iran.
Then they'll stay. In America, the civilians call the shots.
Disagree. The current president, wants out and will blame Biden, for not moving or reinforcing the bases before the war. |
Trump will have joined Biden by the time all these things will be decided.
| The US military will provide cover for Trump, as they know militarily this is the correct decision, they have been pushing for this. |
There is no 'military' in the USA. There are squabbling Chiefs of the four services, all of whom have their own set of interests. Even if all four agreed skedaddling from the Gulf was imperative, they'd be up against all manner of other interests who think it isn't. Why do you think America is always hopeless at Grand Strategy? Too many cooks and only one chef.
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